Jam City to become publicly listed after entering merger with DPCM Capital

Jam City, Inc is set to become a publicly listed company after entering into a definitive merger agreement with DPCM Capital, Inc.
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Mobile entertainment company Jam City, Inc is set to become a publicly listed company after entering into a definitive merger agreement with DPCM Capital, Inc, a publicly traded special purpose acquisition company led by Chairman and CEO Emil Michael.

The transaction values the combined company at an enterprise value of $1.2bn, and upon closing it will operate as Jam City Holdings Inc. Its Class A common stock is expected to be listed on the New York Stock Exchange under the ticker symbol JAM.

In conjunction with the closing of the business combination, Jam City will use the cash proceeds to acquire Montreal-based mobile game publisher Ludia Inc from FremantleMedia Canada Inc, bringing together two leaders in mobile gaming and further strengthening Jam City’s market position and global player network.

The combined company’s portfolio of top-grossing games is expected to include Harry Potter: Hogwarts Mystery; Cookie Jam; Panda Pop; and Jurassic World Alive. It is also expected to benefit from a pipeline of tentpole-owned and licensed game releases with leading brands such as DC, and some of Disney’s biggest brands, which are expected to accelerate organic growth for the next several years.

Chairman and CEO of Jam City Chris DeWolfe said: “We have built and are scaling one of the world’s leading mobile entertainment platforms by bringing art – including storylines, characters, and game mechanics – together with a powerful technology platform that leverages data to drive user acquisition and live game operations.

“We expect going public will provide us with a source of capital to accelerate our growth and advance our strategic priorities while acquiring and teaming up with Ludia adds compelling new intellectual property and gaming genres to our catalog. Together, we believe these transactions will advance our vision to create premium, social mobile games that are an enduring part of our players’ lives.”

DeWolfe and the rest of Jam City’s management team including co-Founder, President and COO Josh Yguado, and CFO Jae Yu will lead the combined company. Denmark West, founding partner and Chief Investment Officer of Connectivity Ventures and a former executive at BET, Viacom Media Networks, and Microsoft, will join the combined company’s Board of Directors.

Existing Jam City stockholders are expected to own approximately 65% of the outstanding shares of Class A common stock of the combined company at close, assuming no redemptions by DPCM Capital stockholders. Netmarble Corporation, Jam City’s strategic investor, will own a significant portion of the combined company.

Yguado commented: “We believe our central technology platform, Jam City Live, is what sets us apart and provides us with a sustainable competitive advantage by driving performance and growth to create enduring franchises.

“We believe that games are the next generation of social engagement and that our longstanding relationships throughout the global gaming ecosystem provide us access to a rich pipeline of untapped, accretive growth opportunities that we are poised to capitalize on.”

A group of institutional investors, along with Netmarble, DPCM’s sponsor, and members of the combined company management teams have committed to a private investment of $100m in Class A common stock of the combined company that will close concurrently with the business combination and, subject to any redemptions by DPCM Capital’s shareholders, there is approximately $300m currently held in DPCM Capital’s trust account.

Proceeds from the transaction will be used to finance the $175m acquisition of Ludia from Fremantle, provide liquidity to an early investor, and pay fees and expenses associated with the transaction.

It is expected that the combined company will have approximately $115m of cash on its balance sheet, which is anticipated to be used to accelerate growth by introducing new games that appeal to broad global audiences, continuing to enhance its proprietary technology, and pursuing future M&A opportunities and other strategic initiatives.

Michael added: “We believe Jam City is at the forefront of mobile gaming, and its unique games-as-a-service model has proven to sustain player retention and drive monetization. We are proud to partner with Chris, Josh, and the team in their efforts to continue Jam City’s growth and further define the company as a category-defining entertainment brand.”